Cuomo Seals Budget Deal With New York Legislative Leaders

Governor Andrew Cuomo struck a deal
with New York (STONY1) lawmakers on a $132.6 billion budget, opening a
path toward the earliest passage of a spending plan since 1983.

The agreement raises funding for schools, sets up a
gambling commission and provides $13.1 billion for the
Metropolitan Transportation Authority’s five-year capital
budget. The Legislature may start voting tomorrow on the accord,
which also establishes a task force to oversee infrastructure
projects that Cuomo said will create tens of thousands of jobs.

“When we say we got the budget done on time, most people
say, ‘big deal, you’re supposed to get it done on time,” Cuomo
said today at a press conference in Albany, the capital. “For
many years it wasn’t done on time and that became a metaphor for
the symbol of dysfunction in Albany.”

The budget closes what was once a $3.5 billion deficit, a
process made easier when lawmakers in December approved a Cuomo-
backed tax increase on joint earners making at least $2 million
annually, which lowered the gap to $2 billion. The remaining
savings were reached mostly by consolidating state agencies.

The talks in Albany focused on allocating a 4 percent
education-funding increase, or about $800 million. The final
piece fell into place as negotiators for legislative leaders and
Cuomo, a 54-year-old Democrat, agreed to reduce the amount
provided through competitive grants.

Competitive Grants

Cuomo had proposed doling out $250 million through
competitive grants. Lawmakers wanted more money disbursed based
on need. The deal provides $75 million for competitive grants
over the next two years, said Senate Majority Leader Dean Skelos, a Long Island Republican. Another $50 million to be
awarded that way this year hasn’t been spent and may carry over.

Skelos and Assembly Speaker Sheldon Silver, a Manhattan
Democrat, spoke about the agreement yesterday at a hearing of
the Legislature’s Joint Budget Conference Committee.

“Through the spirit of compromise with our colleagues in
the Senate and the governor’s staff, we were able to identify
and address many of the priorities in what has been agreed to in
this budget,” Silver said yesterday. “We are ready to pass an
early budget this week.”

Health-Care Exchanges

Lawmakers and Cuomo didn’t include creating a state health-
care exchange in the spending plan, which Cuomo had proposed.
Cuomo and Silver want to set up a one-stop shop for health
insurance before the federal government steps in and does the
job, under President Barack Obama’s 2010 health-care overhaul.
Republicans who control the Senate were reluctant to support it.

The exchange won’t be part of the budget, Skelos said.
Cuomo said today he’ll issue an executive order this week
creating one.

A proposal to cut small-business taxes, included in the
budget resolution passed by the Senate this month, also won’t be
in the spending plan, Skelos said.

“We can do a lot of things after the budget,” he said.

New York’s 2013 fiscal year begins April 1. If the spending
plan is passed and signed before then, it would be the first
back-to-back years of on-time budgets since 2005 and 2006,
Morris Peters, a state Budget Division spokesman, said by e-
mail. If it’s passed March 30, a day earlier than last year, it
would be the earliest budget approval since 1983, he said.

Boost for City

Some of the budget’s most contentious issues were resolved
March 15, when the Legislature approved a Cuomo-backed pension
overhaul and a teacher-evaluation system, items that were part
of the spending plan Cuomo sent to lawmakers in January.

“City taxpayers are winners today in Albany,” New York
City Mayor Michael Bloomberg said in an e-mailed statement.
“The components of the budget agreement announced today, taken
together with the landmark pension-reform overhaul announced two
weeks ago, herald the best legislative session for the city in a
decade.”

The mayor is founder and majority owner of Bloomberg News
parent Bloomberg LP.

An agreement reached March 25 would provide $13.1 billion
to fund the last three years of the MTA’s five-year capital
budget, letting projects such as the Second Avenue subway
proceed as planned, according to Senator Charles Fuschillo, a
Merrick Republican who heads the chamber’s Transportation
Committee. The state had provided only $9.1 billion for the
first two years.

MTA Debt Ceiling

The deal raises the MTA’s debt cap by $7 billion and
includes a $770 million payment from the state to the MTA’s
capital program. The payment will come from the proceeds of
bonds issued by the Thruway Authority, the Dormitory Authority
and the Urban Development Corp (28410MF)., according to a budget bill
printed today.

Another deal would create a seven-member gaming commission
to oversee Indian casinos, horse racing, and run the state
lottery along with its video terminals at race tracks. The
commission, with five members named by the governor and one each
picked by Skelos and Silver, will replace the current Racing and
Wagering Board and the Lottery Division.

This month, the Legislature passed a proposed
constitutional amendment that would permit as many as seven Las
Vegas-style casinos in the third-most-populous U.S. state. The
amendment will go before voters if lawmakers approve it a second
time next year. The bill creating the commission doesn’t mention
non-Indian casinos.

Infrastructure Task Force

A separate measure would create a 15-member infrastructure
task force to determine the state’s building needs and develop a
plan for meeting them. The panel, part of Cuomo’s original
proposal, would also recommend financing options, including
using state-backed debt, federal funds and “other finance
vehicles.” Cuomo is seeking legislation separate from the
budget that would let investors take part in public
infrastructure projects.

The budget will also create a $15 billion infrastructure
fund that combines $1.2 billion in state funding, with $1
billion from the federal government and $9.3 billion from state
authorities, including $5 billion for a new Tappan Zee Bridge.
The commitment of government cash, Cuomo said today, will help
draw $3.5 billion from private entities to fill out the rest of
the fund.

“We’ve never looked holistically about what our
infrastructure priorities are,” Karen Rae, deputy secretary of
transportation, said in an interview in New York before the
accord was reached. “This is a much more proactive intervention
on how we prioritize across many agencies.”